How does a millennial New York brokerage owner expand his business? If you are 27-year-old Zach Ehrlich, founder of Mdrn. Residential (pronounced “modern residential”), you try to address pain points head-on.
- The three-year-old independent NYC brokerage, Mdrn. Residential, is taking vertical integration to a new level with its Stoop app.
- The app has been designed to improve residents' experiences with their building and property managers; in some cases, Mdrn. takes on the property management.
- The brokerage hopes this will keep Mdrn. agents in clients' lives more regularly.
How does a millennial New York brokerage owner expand his business?
If you are 27-year-old Zach Ehrlich, founder of Mdrn. Residential (pronounced “modern residential”), you try to address pain points head-on.
Ehrlich, for instance, has turned his relocation division into more of a concierge service, taking over all the tasks involved in a home move. Meanwhile, his team is going to be managing a number of Manhattan buildings as part of a new service to keep in front of clients.
“We wanted to develop a recognizable real estate brand that also had cachet among the city’s residents and potential clients,” explained Ehrlich, who started the brokerage at the age of 24 in 2014.
The ultimate mission of the business is to achieve vertical integration across residential real estate from property management, development and relocation, as well as residential sales and rentals.
The tech-led brokerage is working on ways it can become more active in residents’ and future clients’ everyday lives. As opposed to the infrequent involvement and value brokerages have with clients today, Mdrn. envisions a world where future clients are interacting with the firm consistently — and so, when the time comes to relocate or list, they will be more likely to reach out to the firm.
New neighborhood and building platform: Stoop
Part of this thinking can be seen in the company’s app, Stoop, currently being rolled out in the financial district of New York City in the first half of this year.
It is an integrated neighborhood and building web platform enabling building and local residents to meet, interact and access on-site and neighborhood services at preferred prices. The app is designed to improve resident and building experiences.
“Building out this platform across the city gives us a window into residential life and how it can be improved through a combination of technology and service,” said Ehrlich.
Upcoming features to the platform are focused on offering internal building infrastructure to landlords, management firms and associations. This will enable improved resident management, allowing operators to improve resident welfare, services and overall programming throughout individual properties, as well as managed portfolios.
Mdrn. will also be putting its hand up to manage buildings on behalf of landlords and associations although not through Stoop.
“These are related areas — managing a building and doing a great job. We are going to keep in consumers’ minds and remind them of the fact that we are also brokers working with them to list. The idea is to be able to directly market various services that relate to people’s day to day lives and homes and take that and improve the experience they are having,” noted Ehrlich.
The “holy trinity of landlord, property manager and agent” being involved in a single transaction is archaic and can be streamlined by resting brokerage and management operations under one umbrella, he added.
The entrepreneur is hoping to learn some key information from the experience, as well as giving the brokerage an additional source for relocation and client leads.
“We can streamline that process even further by understanding building turnover and where landlords and property managers can improve to maximize occupancy and rent roll,” he said.
If a brokerage is handling the property management, the agents will have less hassle getting clients approved and less uncertainty about the building, he added.
Less a relocation division, more a dedicated concierge service
An extremely hands-on relocation service is another offering that Ehrlich has created to build up goodwill between his agents and clients.
It’s more than a specific relocation service; it’s more like a dedicated concierge, he said.
For the past six months, Mdrn. has had an internal relocation department,“M,” a concierge and building platform which manages clients’ moves. An account is set up for them and M organizes the moving company, the painters, sets up utilities, mail forwarding — everything every incoming client has to deal with.
“Mobility is happening at a younger age — some people are doing it every three or four years. It becomes really relevant helping them,” said the 27-year-old.
“What we are doing is saying how do you reduce the stress for the consumer and agent,” he said.
Agents can help ensure the move goes the way it should by handing some of these concerns off to a point person, he said.
“Whether rental or sale, more than 80 percent of agents in the market don’t follow the transaction all the way through. After that, it’s the client’s responsibility to move and liaise; it’s a big pain point coordinating with the moving company and so on.” The entire relocation service has been digitized and automated at Mdrn. so that it’s part of every transaction. A digital completion form shoots off client information to a point person.
While the “M” point person will handle all the details, the agent will keep up the contact with the client.
“The agent ends up looking great and as if they had been responsible for the coordination,” said Ehrlich.
Consumers are happy to have the service and are surprised that it’s offered, he added, noting that he doesn’t charge for the service.
“We expect it to be a market norm in the future as it’s still a major pain point alongside the actual residence search process. We have found that the system has not been abused – and it’s been valuable in terms of doing and brand recognition.”
Young entrepreneur hires senior players from NYC market
This may seem like a lot of divisions for such a young company still making its way in the residential sales business, you could argue.
With 25 agents at the beginning of 2016, the sales volume and leasing activity together totaled $50 million. Now with 50 agents at the beginning of 2017, Ehrlich is forecasting a $100 million sales volume for the year, based on initial January closing and activities. The brokerage works across Manhattan, Brooklyn, Queens and the Bronx.
Ehrlich has also enlisted some substantial help from three senior market players recently — bringing in a sales director, a director of talent management and a listings manager, all veterans of the New York real estate industry, previously with Bellmarc Realty, among other companies.
Former sales manager of Bellmarc Realty’s Midtown office, Dan Berman, will be Mdrn.’s sales director responsible for training and educating new brokers in all facets of NYC residential sales as well as helping seasoned brokers to build their sales volume.
Olivia Turturro is the company’s new director of talent management; her most recent experience involved expanding Weichert Properties’ operations in NYC to over 100 agents across 3 offices within an 18-month period with the firm.
Meza Eythel, meanwhile, has joined as listings manager, a role he previously had at Bellmarc Realty and AC Lawrence. He will manage key landlord and management relationships for Mdrn., many of which have been developed over his 19-year career in real estate.
Ehrlich is pleased with the effect they are having on the business already.
“When you take experienced personnel who understand the fundamentals of the business and you bring them into a different type of culture, provide them with tools and resources just a little bit on the progressive side, it can really strike a balance of people and place,” he said.
“When you put the expertise in a really growth-oriented environment you end up getting much more, it’s the ideal balance — it’s about having a balance of old and new.”
Ehrlich, who is planning a new office for all his 50 agents this year, said he is already seeing a number of recruits being brought into the company.
Of every 10 hires the company makes, around two to three are typically new agents.
“Our primary focus is on bringing on productive agents whose business we can better scale through marketing and additional infrastructure that these agents are not used to having,” he said.
At this point there are 10 additional staff alongside the agents, mostly managers and supportive personnel. There are five agents for every manager, said Ehrlich
Mdrn. takes pride in its in-house marketing design team for agents.
Internal marketing and design resources are set up as a self contained marketing and design studio. Agents are able to have custom blasts and custom websites, offered as part of their affiliation.
No agent uses the same marketing material — they each have a different look and strategy, said Ehrlich.